China Financial Leasing (HKG:2312) proposes to effect a capital reduction pursuant to which the par value of each of the issued shares will be reduced from HK$0.20 to HK$0.02 each by cancelling the paid-up capital to the extent of HK$0.18 per issued share. Immediately following the capital reduction becoming effective, each authorised but unissued share will also be sub-divided into 10 new shares with a par value of HK$0.02 each.

As at 31 May 2012, the company had accumulated loss of HK$54.405 million. It is expected that the accumulated loss of the company will be eliminated after the capital reduction. The capital reduction and the sub-division will give greater flexibility to the company in future fund raising, which may or may not occur, to accommodate future expansion and growth of the company and the elimination of the company's accumulated loss will therefore facilitate any dividend payment by the company as and when appropriate in the future.